Standing Committee A

[Sir John Butterfill in the Chair]
(Except clauses 13 to 15, 26, 61, 91 and 106, schedule 14 and new clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Tax Act 1984)

Clause 173 ordered to stand part of the Bill.

Clause 174

International tax enforcement arrangements

Question proposed, That the clause stand part of the Bill.

Dawn Primarolo: Good afternoon, Sir John. It may help the Committee, given that clauses 175 to 177 result from clause 174, if I briefly explain its purpose.
The clause is an enabling measure that will extend the United Kingdom’s ability to enter into international agreements for mutual assistance in the enforcement of taxes. Those agreements may cover the exchange of information, assistance in tax collection and the service of documents. The UK has more than 100 bilateral agreements providing for such exchange on direct taxes. Within the European Union, there is a well established framework for assistance on direct and indirect taxes, including the recovery of debt. The clause allows for the United Kingdom’s entering into multilateral tax arrangements.
The Government announced in the pre-Budget report our intention to ratify the Council of Europe and Organisation for Economic Co-operation and Development convention on mutual administrative assistance in tax matters. The convention contains provision for exchange of information, multilateral tax examinations, and assistance in tax collection and service of documents. It also contains important safeguards, and I want to discuss those in particular. They relate to the confidentiality of taxpayer information.

Rob Marris: I understand that the convention to which my right hon. Friend referred is a 1988 convention. Has it really taken the United Kingdom 18 years to put it into domestic legislation?

Dawn Primarolo: No, it has not taken the United Kingdom 18 years. For a convention to be effective the member states that subscribe to it must also put it into their law; otherwise it cannot work. Regrettably, although the United Kingdom has championed the argument about the exchange of information internationally, both in the OECD and in the European Union, it is only relatively recently that the convention has reached the point at which it can be ratified by the United Kingdom, and used. My hon. Friend will be well aware that the principles in the convention will be found also in our tax treaties. It has been the practice of both Conservative and Labour Administrations for a long time to advance and extend the double taxation agreements.
I was referring to the important safeguards on the confidentiality of taxpayer information. That is a matter that always prompts some discussion in debates on double taxation treaties. So it should—for every agreement. Each one is negotiated individually, and reassurance about that is important for every tax treaty. 
Under the convention, the information obtained is to be treated as confidential in the receiving state in the same manner as information obtained under its domestic law, or under the conditions of secrecy applying in the supplying state, if those are stricter. That is particularly important for the United Kingdom, because we have strict confidentiality with respect to the exchange of taxpayers’ information. We shall have occasion to consider that aspect of the matter again on clause 178. That applies even within United Kingdom authorities. Outside the United Kingdom, we adhere very tightly to the strict conventions, and that dictates whether we will exchange certain types of information with other states; their standards have to be at the same level as ours.
The convention also sets outs instances in which states are not obliged to provide assistance. An example would be where a state’s domestic law would not allow it to obtain information or if there were public policy grounds.
The clause also allows the United Kingdom to extend the scope of its bilateral treaties to include indirect taxes, such as VAT. VAT is, of course, a tax on consumption, and consumers should pay that tax at the rate voted for by the Parliament in the country where the consumption takes place. That is another important principle that the UK continues to advance in all international forums, but particularly in the European Union.
As a result of globalisation, deregulation and technological advances, a range of services can routinely be purchased by private individuals from suppliers in other jurisdictions, including those outside the EU. Extending mutual assistance arrangements with such countries will support our efforts to ensure compliance and help to tackle tax fraud—an issue about which this Committee, like all Finance Bill Committees, has been very concerned.
In addition, the clause consolidates the existing enabling legislation concerning agreements about the international exchange of information. As with the existing legislation, agreements provided for in the clause are made by Her Majesty in Council subject to prior consideration and approval by the House. I reassure the Committee that, as now, any order will be subject to the affirmative resolution procedure, in the same way as our double taxation treaties are.
I will be happy to hear points on which hon. Members seek clarification, but I commend the clause to the Committee.

Theresa Villiers: I am grateful to the Paymaster General for her opening remarks, which have given me some reassurance on one or two of the points that I wanted to raise, but I still have some anxieties about clause 174 and the consequential clauses, 175 to 177. I shall follow her lead and deal with them as a whole, so that I need not trouble the Committee separately in relation to the subsequent clauses.
Of course, the Opposition recognise the advantages of entering into agreements with other countries in relation to the collection of information on tax. That should, we hope, put us in a stronger position to ask for help from foreign Governments in collecting information about the overseas tax affairs of British citizens. The exchange of information has been part of our general tax law for some years. However, traditionally, such exchange has been based on specific double taxation agreements. The information exchange envisaged by such treaties in the past was rather more narrowly focused than the clauses under consideration. It generally extends only to that which is required to allow the treaty to give relief—that is, only to the extent that the treaty relieves individuals’ tax liabilities.
The clauses seem to give Her Majesty’s Revenue and Customs rather wider powers to start to enforce the tax laws of other countries and to investigate people’s liability to tax under foreign jurisdictions. However, it has long been established—since the case of Government of India, Ministry of Finance v. Taylor in 1955—that the courts will not enforce the tax laws of other countries. I have received a number of representations from organisations that are worried that the clauses may undermine that long-standing principle.
The Institute of Chartered Accountants expresses a number of concerns. Its briefing for Committee members states:
“We are concerned that the consequence of the UK signing up to the...Convention”—
the 1988 convention—
“could be that the UK would be asked to enforce tax collection on behalf of overseas jurisdictions, party to the multilateral convention, which do not have the same...standards of ‘due process’ as the UK to ensure that tax was properly payable by the person against whom the enforcement was being required. This would breach the Human Rights of the person against whom the enforcement was being required. This is compounded by the fact that HMRC officers have a unilateral power to disclose and the taxpayer has no rights of appeal, nor to know that it has even happened.”
The institute goes on to point out that although subsection (5)—the Paymaster General has adverted to this—specifies that the clause will not be applicable where the overseas jurisdiction does not have appropriate confidentiality rules in place, it contains no such safeguard in relation to human rights, due process or the general integrity of the tax system.
Similar concerns are expressed by the Chartered Institute of Taxation, which says:
“We are concerned that should the UK ratify”—
the 1988 convention—
“tax payers resident in the UK could automatically be exposed to foreign tax claims from jurisdictions having a system of law (in connection with the process and assessment of tax) which does not meet the same standards as those applicable in the United Kingdom.”
The institute points to the problems that could arise where the taxpayer has no right of appeal in the foreign country on the substantive question of whether the tax is due.
The tax systems in a number of countries are not rules-based in the way that the United Kingdom system is. I have received representations about countries taxing companies on their so-called profits, which far exceed the actual profit made in that jurisdiction. I am told that that is a problem in some middle eastern countries, and similar concerns have been raised about certain African countries. In countries such as Russia, the interpretation of tax rules can differ widely between different tribunals and cities. In some countries, there are also disproportionate penalties in tax law. In China, for example, non-payment is technically punishable with the death penalty.
The Law Society echoes the concerns of the other professional organisations that I mentioned. It says:
“Our concern is that HMRC may find themselves compelled to collect taxes by an overseas jurisdiction that does not have the kind of rules based tax system or tradition of non-corrupt administration that is taken for granted in the UK.
We believe that mutual assistance with the collection of taxes should be restricted to those countries that have a high standard of public administration”.
It is worth looking at the experience of cross-border tax law enforcement in the European Union. The powers that we are considering have some precedent in EU law and in the EU directive on mutual assistance in the recovery of taxes. The difference, however, is that the EU directive requires member states to adhere to minimum levels of fairness. The accession process and the adoption of 50,000 pages of the acquis communautaire involve, among many other things, an extended vetting process to ensure that accession countries’ tax laws meet minimum requirements.
Agreeing to enforce the tax laws of other EU member states, therefore, is one thing, but enforcing the laws of any country that signs up to the 1988 Council of Europe convention on mutual administrative assistance in tax matters is quite another. There is real anxiety that the safeguards in relation to the EU laws are not in place here in relation to the convention. We should not forget that countries where there is widespread abuse of human rights will not hesitate to use their tax systems as part of their means to suppress dissent, and I imagine that the Government would not be happy enforcing the tax laws of countries such as Burma or Zimbabwe. I would be interested to hear the procedure that the Government would follow should a country with a controversial human rights record sign up to the 1988 mutual assistance convention.
At present, only certain EU member states, plus the United States and Azerbaijan, are signatories. It would be useful to hear from the Paymaster General what will happen when other countries, with more controversial tax systems and human rights records, sign up. It seems that such countries do not have to give guarantees about the content of their own tax systems before they sign up. The Paymaster General said that there will be a process of parliamentary assent before any further use is made of the powers, and I should be grateful if she could confirm that that process will operate in the case of any new country that signs up to the 1988 convention. That would give Parliament the opportunity to scrutinise the wisdom of agreeing to disclose information to and assist the tax authorities of controversial countries.
In conclusion, I have just a few practical concerns. One, on which I would value the Minister’s views, relates to the cost of inquiries made on behalf of foreign Governments. What happens if the Government spend time and money making investigations on behalf of foreign Governments only to find that they do not receive an equivalent level of assistance in relation to the tax affairs of British citizens abroad? Is there any procedure for reimbursement of the cost of investigating tax matters on behalf of foreign Governments? Do the Government have the power to turn down requests on the ground of disproportionate cost?
There are also concerns about the notice of investigation. Another restriction that could be incorporated would be to confine investigation on behalf of foreign Governments to cases in which the Government had already chosen to investigate a particular taxpayer’s affairs. Some concern has been expressed about the prospect of British taxpayers being subject to a bolt-from-the-blue investigation of their tax affairs with no indication of what is going on. The Chartered Institute of Taxation would go even further, calling for safeguards to be written into the legislation so that no disclosure could occur without the approval of the High Court.
Another practical concern on which I would value the Paymaster General’s input is that HMRC could be carrying out investigations on taxes that are entirely unlike taxes levied in this country. They might include the Saudi religious tax—the Zakat—or the Korean education tax. Others include the Eritrean rehabilitation tax, which has caused concern in relation to religious freedom, and the Libyan jihad tax, a form of payroll tax that I believe has given rise to complications. I value the Minister’s assurance that HMRC will not be involved in investigating such controversial taxes, even should the relevant countries sign up to the 1988 convention, because it could give rise to significant practical as well as constitutional difficulties.
My last anxiety is about the extent of the reciprocity in relation to the information to be gained under clause 175. It refers only to taxes or duties covered by those arrangements; there seems to be no explicit requirement that a foreign Government should have agreed to investigate the evasion of UK taxes in their country. Such an undertaking would surely be an important prerequisite to action in this country by our Government. I am particularly concerned to ensure that we have genuine reciprocity; even when double tax treaties are in place, enforcement sometimes leaves something to be desired. For example, Italy is meant to give tax credits on dividends paid to UK shareholders, but it has an almost decade-long backlog in refunding those credits.
The provisions give HMRC some significant new powers to take legal action and to make investigations in relation to foreign taxes. Some view the provisions with anxiety, as if the Bill has a sting in the tail, and the Opposition are concerned that although the legislation provides some safeguards, as outlined by the Paymaster General, they are insufficient. That is so particularly in relation to countries with doubtful human rights records, which could in theory sign up to the 1988 treaty. I hope that she will be able offer some reassurance to me and to those organisations that have contacted me expressing their anxiety about the provisions.

Dawn Primarolo: I am happy to respond to the hon. Lady’s inquiries on this important area. I am a little surprised at the views expressed by the Chartered Institute of Taxation, which normally follows closely tax law and tax practice, not only in the UK, and which I thought understood very well the processes with regard to our double taxation treaties. Of course, confidentiality, protection and the refusal to provide information are all pertinent to the double taxation treaties, which allow for the exchange of information, and this and previous Governments’ approach to the matter is well known.
It is also well known and generally accepted that the quickest way to ensure that the tax authorities have the information that they require is through information exchange. It is less burdensome, it is transparent, and it deters those who might think about concealing their tax affairs in another jurisdiction, because it is quicker to settle them in the correct jurisdiction.
I shall deal first with the hon. Lady’s example about signing of the convention by countries with human rights records that are at best inadequate and at worst positively unacceptable. She cited Burma, China and Zimbabwe, although there are others. The convention is open only to OECD and Council of Europe countries, and both those organisations have strict policies on human rights. In the case of the OECD, human rights are relevant even to whether a country receives observer status, let alone full participation rights or final membership. So the point is a red herring.
Furthermore, there is a back-up. The convention provides that—as is currently the practice in our double taxation treaties—information can be refused. The small and dedicated team that deals with information requests at HMRC has a lot of experience, and if the team suspects that the requested information might in any shape or form endanger the human rights of an individual, it can refuse to provide it without explanation. We have discussed that in previous Finance Bills when we considered mutual information exchange.
On tax treaties, the hon. Lady misunderstands. All the existing tax treaties contain exchange of information provisions that allow parties to tackle evasion and ensure that correct amounts of tax are paid. That has been operational for some time, and no principle will be breached by the proposals, nor are we moving on to new ground. It is correct that there are relatively recent developments on indirect tax in relation to double taxation treaties, but those treaties do slightly more than just relieving double taxation.
I shall deal shortly with disproportionate penalties and the important points about confidentiality, as well as the matter of comparable, like for like taxation.

John Hemming: Will the Paymaster General explain subsection (1)? It says:
“those arrangements have effect (and do so in spite of any enactment or instrument).”
Obviously, that does not exclude the European Communities Act 1972, nor the Human Rights Act 1998, and to that extent an important constitutional precedent is being established—particularly as the provision deals with debt recovery, which is a more definite action than information provision. What consideration have the Government given to the constitutional implications of the proposal?

Dawn Primarolo: I was going to come to debt recovery, because the hon. Member for Chipping Barnet (Mrs. Villiers) also asked questions about it, so perhaps the hon. Gentleman will let me take things step by step. If hon. Members think that there is something new and different from our double taxation treaties here, they are labouring under a misunderstanding. This is about tax information provisions, which follow the same point.
The next point that the hon. Lady made was about which taxes and duties would be covered. She made points about a tax that would not be levied here. All the taxes covered are those with a UK equivalent that—to make it even narrower—is within the remit of the Finance Bill. Anything that moved beyond being an equivalent of such a tax would not be required for exchange; it has to be narrowed down for that point.
I want to reiterate a number of points about confidentiality and then go on to the process. I tried to make it clear in my introduction that the rules operating in the other state that we are exchanging information with would have to be as strict as ours in order to open the exchange. If we did not think them comparable, with the same protections, it would not be opened. That reassurance is sought as part of the negotiations on double taxation treaties. If HMRC was not satisfied on those assurances, the provisions would not be applied.
The hon. Lady then asked about acting on behalf of other jurisdictions—covering the debt recovery point—and exactly what is going to happen here. I again need to put on the record that HMRC has a great deal of experience with the 100-plus taxation treaties that we already operate, and we are building on that. However, a state would not be required—so we would not be required—to carry out measures at variance with its own laws or administrative practices. That is another way out.
Then, the request for assistance in recovery—not investigation—should not be made in the first place if the requesting state has not gone through all the necessary legal processes to prove that the debt exists. States cannot decide that they prefer to use our enforcement rather than their own. They have to go right the way through their processes and make the case for the debt. Only at that point can the request be made, and even then there would be conditions. Is it comparable? Are we satisfied on the confidentiality standards? Are we satisfied that there is a case to be answered?
The hon. Lady asked about costs being proportionate. HMRC could refuse assistance, even after being satisfied on those other points, if it felt that the costs were disproportionate. That kicks back into our own rules as well. That is a double lot. It could say that the cost of providing the assistance is disproportionate in its view and therefore it declines to make that arrangement.
The hon. Lady said something about a right of appeal. It is true that there is no right of appeal against disclosure of information, but there never has been. I keep going back to the 100-plus tax treaties that we have. What the taxpayer can do, because we are talking about a tax debt in another jurisdiction, is to contest it there. They can contest the debt—

Theresa Villiers: Only if they are allowed to.

Dawn Primarolo: Yes, absolutely, but that would come back through the powers that say that the same rights are not provided as in the UK system, so the principle of the highest standard is not met, and we shall not assist in the recovery of the debt, whether it is considered proven or not.
The Department’s practice has always been that it would need to be satisfied that in providing the information—this is one of many qualifications—or pursuing the debt, if it had been established, the confidentiality of the taxpayer’s information would be safeguarded to the same standard as our own. At such a point, we could say, “No, we are not doing this.”
May I remind the hon. Lady that our standards are very high? The standard in the UK is that sharing confidential taxpayer information is a criminal offence that can be prosecuted. If an official in HMRC shares any taxpayer information with a non-authorised person—someone outside HMRC or, sometimes, outside the specific area—they are liable to criminal prosecution. HMRC has information gateways, and when the information moves on, the criminal prosecution is attached to the information and not to the person who discloses it. If we were not satisfied that the information was protected to that level, we would not disclose it.
The Department understands the delicate balance involving the confidence of taxpayers and their knowing that they are providing information that is used for the appropriate measures for which it was sought. Where it is transmitted, either in the UK to another authority or outside the UK, it must have that same protection and exceptional grounds must be involved.
I think that I have dealt with the point. I said to the hon. Lady that if there is any situation in which HMRC honestly believes that providing the information requested could lead to an abuse of the individual’s human rights, that information will not be provided. There are tight standards. Members of this Committee need to examine how HMRC protects information here in the UK. Things will be done to those standards and information will not be provided in any other circumstances.
I think that I have covered all the points. An individual’s human rights are clearly protected, but we must make it clear to individuals that due process and co-operation can take place in the exchange of such information in tight circumstances. The hon. Lady need only examine the tax treaties that we currently have to see that.
The double taxation treaties are already subject to affirmative resolution. Any tax agreement will come through this House on affirmative resolution. At every point, the Government will be able to be pressed. They will therefore give the assurance that all these considerations—at each point in each agreement and not just as a general series of points on this clause—are protected. That gives tax authorities the appropriate tools to do their job effectively, but importantly it provides the strict safeguards that we would expect in respect of information that is provided on a confidential basis.
I hope both that the hon. Lady accepts those reassurances and that she will be reassured that the points she raises are important. It is important that all Governments and all Ministers should be vigilant on the use of taxpayer information and its protection by confidentiality.

Theresa Villiers: I am grateful to the Paymaster General for what she has said. This has been a useful debate and it has reassured me on a number of serious matters. I acknowledge the strength of the Minister’s point that to get into the OECD and the Council of Europe a nation must be subject to vetting procedures. I fear that she may still need to use other safeguards, because the process might not be foolproof given the detail involved in tax legislation. A few countries with tax systems in which due process is not up to scratch might slip through the net, get into the Council of Europe and the OECD and have the opportunity to sign up to the convention. They would have to surmount a useful hurdle, but the other safeguards outlined by the Paymaster General, particularly the public policy safeguards, should be ready for deployment in case the vetting procedures for those organisations do not cover all relevant issues.
I am also grateful to the Paymaster General for emphasising not only the fact of the safeguards but the importance of being vigilant and using them extensively to ensure that HMRC is not party to collecting taxes levied with the motivation of a breach of human rights. I hear what she says on costs and I am reassured to hear that the powers in question will have an impact only on taxes broadly aligned with those levied and collected in this country. It is also welcome that she has confirmed that each time a new country is brought within the scope of the powers there will be individual consideration of that country by the Government and the House. Because of the importance of the issues raised, which she acknowledged, I hope that when new countries come into the framework Ministers and other Members of the House will be vigilant in ensuring that all safeguards are in place to preserve human rights and due process in the tax system.

Question put and agreed to.

Clause 174 ordered to stand part of the Bill.

Clauses 175 to 177 ordered to stand part of the Bill.

Clause 178

Disclosure of information

Question proposed, That the clause stand part of the Bill.

Dawn Primarolo: I point out to the hon. Member for Chipping Barnet that the clause provides an example of the fact that the onward transmission of material from HMRC, even within the net of Government or public bodies, carries with it criminal sanctions for the unauthorised, unlawful disclosure of taxpayer information.
The clause ensures that information requested through an information gateway under the Gambling Act 2005 is subject to such a sanction. There was a slight mismatch, because the Gambling Act went through the House in parallel with the Bill that set up HMRC and introduced the criminal sanction, and it was dealt with in the short period before the last general election. That is why we have had to return to the matter now. I assure the Committee that the information has been protected in all that time as well, and the gateway is operational only with criminal sanctions applicable.

Question put and agreed to.

Clause 178 ordered to stand part of the Bill.

John Butterfill: We dealt earlier with new clauses 1 to 5 and new clause 7. Is it your wish, Mrs. Villiers, to press any of those new clauses further?
Mrs. Villiersindicated dissent.

New Clause 8

EXEMPTION FROM PRE-OWNED ASSET TAX FOR ESTATES BELOW IHT THRESHOLD
‘(1) Schedule 15 to Finance Act 2004 is amended as follows.
(2) At the beginning of paragraph 3(1), insert the words “Subject to paragraph 3A below,”.
(3) After paragraph 3, insert—
“3A (1) Paragraph 3 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.
(2) The value of the chargeable person's relevant estate shall mean the aggregate of—
(a) the value of the chargeable person's estate at the relevant time; and
(b) the value of any property that is treated at the relevant time (in relation to the chargeable person) as subject to a reservation in accordance with section 102(2) of the 1986 Act.
(3) The relevant time is—
(a) in a case where the disposal condition would otherwise apply, the time immediately before the disposal referred to in paragraph 3(2)(b);
(b) in a case where the contribution condition would otherwise apply, the time immediately before the provision of the consideration referred to in paragraph 3(3).
(4) The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.
(5) For the purposes of sub-paragraph (2)(a) above, the value of a person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.
(4) At the beginning of paragraph 6(1), insert the words “subject to paragraph 6A below,”.
(5) After paragraph 6, insert—
“6A (1) Paragraph 6 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.
(2) The value of the chargeable person's relevant estate shall mean the aggregate of—
(a) the value of the chargeable person's estate at the relevant time; and
(b) the value of any property that is treated at the relevant time (in relation to the chargeable person) as subject to a reservation in accordance with section 102(2) of the 1986 Act.
(3) The relevant time is—
(a) in a case where the disposal condition would otherwise apply, the time immediately before the disposal referred to in paragraph 6(2)(b);
(b) in a case where the contribution condition would otherwise apply, the time immediately before the provision of the consideration referred to in paragraph 6(3).
(4) The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.
(5) For the purposes of sub-paragraph (2)(a) above, the value of a person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.”.
(6) A the beginning of paragraph 8(1), insert the words “Subject to paragraph 8A below,”.
(7) After paragraph 8, insert—
“8A (1) Paragraph 8 does not apply if the value of the chargeable person's relevant estate is below the relevant threshold at the relevant time.
(2) The value of the chargeable person's relevant estate shall mean the aggregate of—
(a) the value of the chargeable person's estate at the relevant time; and
(b) the value of any property that is treated at the relevant time as subject to a reservation in accordance with section 102(2) of the 1986 Act.
(3) The relevant time is the time immediately before the chargeable person settled the property (or added property to the settlement) as referred to in paragraph 8(2).
(4) The relevant threshold is 80 per cent. of the amount that, at the relevant time, is the largest chargeable transfer that may be made by an individual that is wholly subject to inheritance tax at the nil rate.
(5) For the purposes of sub-paragraph (2)(a) above, the value of the person's estate is the value that would be treated under section 4 of IHTA 1984 as being transferred by that person if that person were to have died at the relevant time.”.
(8) After paragraph 23, insert—

“Automatic application of inheritance tax provisions

24 (1) This paragraph applies if, at any time—
(a) paragraph 3 would apply but for paragraph 3A, or
(b) paragraph 6 would apply but for paragraph 6A.
(2) So long as the chargeable person continues to enjoy the relevant property or any property which is substituted for the relevant property—
(a) the chargeable proportion of the property is to be treated for the purposes of Part 5 of the 1986 Act (in relation to the chargeable person) as property subject to a reservation, and
(b) section 102(3) and (4) of that Act shall apply and this paragraph applies whether or not an election is made under paragraph 21.
(3) In this paragraph “the chargeable proportion”, in relation to any property, shall have the meaning given in paragraph 21(3); a person shall be treated as enjoying the relevant property if he enjoys the property as set out in paragraph 21(4) and the term “relevant property” has the meaning given in paragraph 21.
25 (1) This paragraph applies if, at any time paragraph 8 would apply but for paragraph 8A.
(2) So long as the conditions in paragraph 22(3) are satisfied—
(a) the relevant property and any property which represents or is derived from the relevant property shall be treated for the purposes of Part 5 of the 1986 Act (in relation to the chargeable person) as property subject to a reservation, and
(b) section 102(3) and (4) of the 1986 Act shall apply and this paragraph applies whether or not an election is made under paragraph 22.
(3) In this paragraph, the term “relevant property” has the meaning given in paragraph 22.”.
(9) This section has effect from 6 April 2005 as if Schedule 15 had always had had effect subject to the amendments in this section.'.—[Julia Goldsworthy.]

Brought up, and read the First time.

Julia Goldsworthy: I beg to move, That the clause be read a Second time.
The new clause seeks to exempt from pre-earned assets tax persons whose estates fall below the inheritance tax threshold, by amending schedule 15 of the Finance Act 2004.
In Standing Committee, we have spent a lot of time debating inheritance tax and the scope for avoidance. We have also spent much time talking about those whose estates are above the inheritance tax threshold. However, the new clause deals with property that could fall below the inheritance tax threshold but be liable for pre-earned assets tax. The annual income tax on continued use or occupation of pre-earned assets was introduced in 2004 to ensure that those who sought to get round the inheritance tax rules on gifts with reservations without a tax charge were caught. We support that.
However, with the help of the Chartered Institute of Taxation and its low incomes tax reform group, I have drafted the new clause to highlight the group of people who fall under the tax, whose assets may fall well below the inheritance tax threshold and who would be inadvertently caught by the tax, perhaps without realising. After making the gift, people may find that they are liable to the tax.
The Chartered Institute of Taxation and its low incomes tax reform group helped me by providing examples that fall outside the narrowly defined exemption that exist in the legislation but still fall in the broad remit of the pre-earned assets tax regime. The first refers to a mother and father who help their daughter and their son-in-law with the purchase of a house. Time passes, the husband vanishes and the daughter succumbs to a serious long-term disease. Six years after giving the money to help with the purchase of the property, the parents move in with their daughter to help to look after the children. According to the interpretation of the Chartered Institute of Taxation, those parents then fall into an annual tax based on the extent of their contribution to the original purchase of the property. I welcome the Paymaster General’s comments on whether she concurs with that interpretation.
The second example refers to a mother and daughter who live together following the death of the father. The mother makes an outright gift to allow the daughter to purchase part of the house in which they both live. The daughter moves abroad to live and work but retains her stake in the house in which her mother continues to live. In that case, the mother would be liable to the tax charge ad infinitum even though the estate would fall below the inheritance tax property threshold. At the point at which the gift was made, they did not consider that they would be reserving a benefit. That would be the case even if the mother had only loaned the money to her daughter. She would still be caught by the tax. I would again like the Paymaster General to confirm that that example would fall into the tax regime. The system could work in reverse. If a son who helped his mother buy a sheltered accommodation property moved in with her to look after her, it would be the son who would be caught by the tax. The new clause seeks to overcome the difficulties for those people who are below the inheritance tax threshold.
Before I talk through the details of the clause, I draw the Paymaster General’s attention to not just the apparent unfairness of the situation but the wider issue of whether the public are even aware that they could be liable to this charge. It is not clear to an individual where in the self-assessment tax return they are held liable to such a charge. At present, those who may be subject to the charge are expected to give an affirmative answer to self-assessment return question 13, which states:
“Did you receive any other taxable income which you have not already entered elsewhere in your tax return?”
I am sure that plenty of people in Committee would not be aware whether they would fall into the circumstances that make them liable to pre-earned asset tax given that question. The pre-earned assets charge is explained only in the explanatory notes, and people consult those only if they think that the question might apply to them at some point. How are those who are currently outside self-assessment even to know that they might be liable? It is not clear how anybody can make sense of this tax without professional advice. Again, I ask the Paymaster General how many people she thinks might be liable for the charge, and how many of them might not be paying it.
Even if one gets so far as to realise that one might be liable for the charge, and one understands it, one will be aware that there is de minimis exemption of £5,000 if the yield is deemed to be an annual rental value of that amount. I shall be interested in the Paymaster General’s comments on how that de minimis was arrived at, as it could clearly catch people whose estate falls below the inheritance tax threshold.
The new clause suggests that the problems for the taxpayer who does not have an accountant could be resolved if the rules and restrictions for the pre-owned asset tax were aligned with those on inheritance tax. Any estate that is below the inheritance tax threshold is exempt. The new clause seeks to amend schedule 15 of the Finance Act 2004 by inserting a series of new paragraphs on property, chattels and other miscellaneous assets, one of which would be new paragraph 6A, which states that the preceding paragraph
“does not apply if the value of the chargeable person’s relevant estate is below the relevant threshold at the relevant time.”
The calculation in that respect is done by taking 80 per cent. of the inheritance tax threshold, which allows for some variation in the valuation of the estate. It also seeks to create a situation in which, if the estate is below the inheritance tax threshold, it is simplified; there is one easy alignment. If a benefit is needed later on the gift that has been given, that will be counted with the estate. That is simpler and makes more sense.
To conclude, our concern is that, as it stands, there is a presumption in the legislation of tax avoidance, although in many cases family circumstances may dictate changing arrangements. The new clause seeks to make arrangements fairer for families who might not have the liquidity to explore the POAT regime, or who might simply want to help each other in difficult times. If people are not eligible for inheritance tax, it seems unfair inadvertently to catch them in that way. I would much appreciate the Paymaster General’s response.

Rob Marris: I have some sympathy with the new clause, but I am not sure that it is worded in the right way or whether it will do what the hon. Member for Falmouth and Camborne (Julia Goldsworthy) said. I seek clarification, and I have seven questions for her, because it seems from what she said that, for example, question 13 on the self-assessment form could be better worded, and that people might unwarily end up liable for tax without realising it.
I cannot refer to line numbers, because the amendment paper does not give them, but at the top of page 1345, we find new paragraph 3A(2)(b). My first question is to ask the hon. Lady what that means. The second and third refer to sub-paragraph (3)(a), which concerns the disposal condition, and (3)(b), which refers to a contribution condition. Can she give examples in each case? Fourthly and fifthly, can she give examples of the disposal condition in paragraph 6A(3)(a) and of the contribution condition mentioned in paragraph 6A(3)(b)?
My sixth question concerns paragraph 25(2)(a) at the bottom of page 1346, which refers to “relevant property”. That is defined in proposed new paragraph 25(3), at the top of page 1347, which refers us back to paragraph 22 of schedule 15 to the 2004 Act. Will the Paymaster General therefore remind the Committee what paragraph 22 currently says about relevant property?
My seventh, and final question, relates again to the top of page 1347. Proposed new paragraph 25(9) states that new clause 8 would be retrospective and apply from 6 April 2005. I stand open to correction, but I seem to remember the hon. Member for Falmouth and Camborne expressing grave reservations in this Committee about retrospective tax legislation. Have I misunderstood her previous comments? If not, why does she seek to make an exception in respect of new clause 8?

Theresa Villiers: I outlined the Opposition’s reservations about the pre-owned asset tax regime at some length when we discussed clause 80, and it would not be productive to repeat those points, but I shall refer briefly to some of them.
As I outlined during that earlier discussion, there is a degree of consensus between the two Front Benches about seeking to ensure that people cannot gain tax advantages by giving away property that they continue to use. However, that consensus breaks down in relation to the Government’s decision to supplement the long-standing reservation of benefit rules, which have applied since the 1980s, with the pre-owned asset tax regime.
We have significant reservations about how the regime operates, and the hon. Member for Falmouth and Camborne gave a number of examples to illustrate that. On a number of occasions, the regime has caught transactions that have nothing to do with tax, and which are all about family members trying to support and financially assist one another. As I said, we live in an era in which the elderly are increasingly asset rich and cash poor, and it is not uncommon for children to wish to buy out a proportion of their homes to release cash for their parents. However, such arrangements fall foul of the regime.
As the hon. Member for Falmouth and Camborne said, one of the real anxieties about the pre-owned asset tax regime is that it bites not only on innocent transactions, but that the people who enter into them can be wholly unaware of the negative tax consequences. That is why we have reservations about that aspect of the pre-owned asset tax regime. As I outlined earlier, we also have reservations about the fact that inheritance tax and pre-owned asset tax could bite in the same circumstances. That is certainly not the Government’s intention, but it does happen, as the examples that I outlined show.
Although new clause 8 would address one area of controversy—the lack of a nil rate band for pre-owned asset tax rules—it would be welcome if the Government were to review the whole operation of the regime. That includes the points raised by new clause 8, although I would not seek to interpret and analyse it in quite the depth that the hon. Member for Wolverhampton, South-West (Rob Marris) did. I have a degree of sympathy with what the new clause seeks to achieve, but it is important to look at the pre-owned asset tax regime as a whole, because it needs significant reform, and I hope that the Paymaster General will consider undertaking a review of its operation.

Dawn Primarolo: The new clause seeks to cater for the position of those who do not have sufficient wealth to be liable for IHT if they die, but who, as the hon. Member for Falmouth and Camborne said, have entered into arrangements that are liable for income tax under the pre-owned asset tax regime.
My officials have been contacted by the Chartered Institute of Taxation and the low income tax reform group and have discussed the views of those organisations about the current provisions and about whether we need to arrange for further changes to the legislation. Despite that discussion and the concerns raised, there has been no evidence—it would be good to have evidence rather than theoretical propositions—of whether people are caught in such a situation. That is despite positive discussions with those two organisations. In fact, as a result of those discussions, HMRC has put detailed guidance on the internet. It was updated at the end of last month, following further consultation and helpful contributions from those organisations.
However, the hon. Member for Chipping Barnet is right; we covered the issue extensively during our discussion of clause 80 and the charges aimed at taxpayers who have engaged in complex tax avoidance schemes. On the whole, such taxpayers know whether they are liable. In addition, there has been detailed guidance to calculate liability and there is printed guidance on the tax return guide, which also directs the taxpayer to the internet guidance and the probate and IHT helpline.
I say to the hon. Member for Falmouth and Camborne that I am aware of the two organisations’ representations, but the facts of the matter—whether there are real cases, the number of them and whether they merit changing the legislation—have not been established. In addition, I am unable to accept the new clause because it would not make the provisions described by the hon. Lady. In particular, the new clause would operate by reference to the value of all of a person’s property at the time that the relevant arrangements are entered into. Some such arrangements could be long-standing, which would mean that there could be cases in which attainment values were not so much impracticable as impossible, and would therefore be a bar.
So far, approximately 1,000 elections into IHT have been received by HMRC. However, the deadline for the self-assessment return for the first year of the charge is 31 January 2007. Although I cannot accept the new clause, which produces an impossible proposition, I have asked my officials, in good faith with the discussions with the two organisations, to work closely with those organisations and to seek out whether there really are examples, and to keep the situation under review. Should it be necessary to return to this matter, we will. That is the better way in which to proceed.

John Thurso: The Paymaster General asked for concrete examples. I have a constituency case that I think fits the bill precisely. It concerns a son who is trying to look after his parents, and I believe that the value of the property is just over £100,000. I do not have the details to hand, but if I may, I shall write to the Paymaster General with them.

Dawn Primarolo: For a minute, I thought that the hon. Gentleman was going to ask me to express a view on that individual case. He prefaced his remarks by saying that he thought the case might be covered.
I am advocating that it is not sufficient to advance that there is a theoretical problem; before we change legislation, we need to be reassured that there are specific examples. I hope that the Committee will be reassured. I hope also that the hon. Member for Falmouth and Camborne will withdraw her new clause and be reassured that the sensible thing is to monitor the situation and to seek out examples, if they exist. The deadline is not until January 2007. If further action is then needed in the very specific cases in question—whatever the reason for such cases arising—and if the legislation does not cover the situation, that will be the appropriate time at which the Government should return to the matter.

Julia Goldsworthy: I thank the Paymaster General for that response, which provides some reassurance that the Treasury is aware of the potential for a problem. The examples that I gave are, of course, theoretical, but it would be useful to know whether the Government intend that people in the circumstances in question should be affected by tax in the way suggested. I should be interested to know what research is being undertaken by the Treasury to see whether that is happening. Perhaps there is no evidence—but perhaps there has been no research. I appreciate that the deadline may not have passed, so the problem may not yet—

Dawn Primarolo: With respect to the hon. Lady, that is a daft proposition. The idea of a problem has been advanced and outside organisations and the hon. Lady have suggested that the legislation should be changed. We cannot set up a research project every time there is a change to the tax system. What is required is that if people have concrete examples not covered by the de minimis of £100,000 they should come forward. That is exactly what the two organisations concerned have been asked to do. We shall then consider the evidence base. The obligation is on those organisations.

Julia Goldsworthy: I thank the Paymaster General for her intervention. Of course, Her Majesty’s Revenue and Customs will also have access to such theoretical examples as I have given. Given that the tax returns do not have to be filed—

Dawn Primarolo: Will the hon. Lady give way?

Julia Goldsworthy: I was not planning to keep the Committee much longer.

Dawn Primarolo: I know, but I just want to explain that the tax authorities know what people tell them. If people do not tell them things, such as that there is a problem, they do not know. That is how tax works. That is why we discuss confidentiality. Taxpayers provide us with information on which we act.

Julia Goldsworthy: My concern is that there may also be people who may not be aware that they fall under the regime in question, until they are investigated by Her Majesty’s Revenue and Customs. There are potentially other reasons why they may become liable for the tax.
To return to the point that I was making, given that the returns will not need to be made until 31 January 2007 and that it may not be possible until then to determine the potential scale of the problem, and given the helpful reassurances by the Paymaster General about how people may or may not be caught, and her agreement to monitor the situation, I shall be happy to withdraw the new clause.

Rob Marris: The hon. Lady sounded as if she was about to ask leave to withdraw the new clause; will she reply to my seven questions before she does?

Julia Goldsworthy: Of course, I am withdrawing the motion, but if the hon. Gentleman wants me to clarify I am more than happy to do that.
The hon. Gentleman raised an issue about retrospection: given that the returns do not have to be filed until January 2007, application from the date in question seemed consistent and sensible. He also raised questions about the value of the property. As I said, the key issue was that the intention of the new clause was that the value of the chargeable person’s estate meant the aggregate of, first, their estate at the relevant time, and, in addition, any other gifts that they might have had, for which they would receive benefit in the future. The intention was—and this holds for the three different paragraphs—that if that value represented 80 per cent. of the inheritance tax threshold it could be exempt from inheritance tax.
I hope that that clarifies matters for the hon. Gentleman, but, as I said, given that the returns will not be filed until 31 January 2007, and given the Paymaster General’s reassurance that she will be open to continued dialogue and representations from those organisations that have raised concerns, I am happy. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 9

YIELD FROM FUEL DUTY AND VAT ON FUEL (NO. 2)
‘(1) The Chancellor of the Exchequer shall publish a forecast for the price of crude oil that shall include—
(a) the anticipated yield from fuel duty; and
(b) the anticipated yield from VAT on fuel
both for the forecast price and for a range of prices up to a maximum of 50 per cent. above the forecast price.
(2) The Chancellor of the Exchequer shall by regulations made by statutory instrument provide that where the price of crude oil rises above the forecast price published in accordance with subsection (1) any additional revenue from VAT on fuel shall be applied to offset any indexed rise in the rate of fuel duty.'. —[Stewart Hosie.]

Brought up, and read the First time.

Stewart Hosie: I beg to move that the clause be read a Second time.
I will be mercifully brief, not least because some Members may recall that we debated a similar amendment to last year’s Finance Bill. However, today’s new clause is slightly different. It would regulate the price of road fuel when world oil prices push up the pump price. It would do that by utilising the additional VAT charged on pump prices that have gone beyond a forecast level, which is to be laid down each year by the Chancellor.
The subject came up in debate last year. The Chancellor already makes forecasts. The question was asked about last year’s Finance Act, and I ask again through the new clause. If such forecasts are to be referred to in statutory legislation, it would have to be provided for in the Bill.
The new clause is not designed to weaken the impact of rises planned for environmental reasons. Using the additional VAT gathered to minimise rises in the pump price will happen only when the price reaches the forecast price and consequently the yield set down by the Government.
When the Chancellor publishes that forecast, I suggest that he should be obliged to publish the anticipated yield from duty and VAT on oil prices up to 50 per cent. above the forecast. That would allow far greater transparency, and all road users would be able to see how much of the VAT yield might be offset against the higher fuel prices in any given circumstances.
Fundamentally, we need this measure or one like it because of the great difficulties faced by the haulage industry, which suffers bankruptcies at twice the rate of other industry sectors. We need it to assist in rural areas—we have debated the subject many times—where the car is essential, no alternative is available and prices are higher.

John Thurso: The hon. Gentleman and I share our concern for the premium paid by motorists in remote rural areas; it is largely a matter of market forces because of the throughput of cars on the garage forecourt. Will the new clause do anything to address the premium, or will the premium be enshrined, with the overall price going up or down throughout the country?

Stewart Hosie: Sadly, it is the latter. By necessity, the fuel tax regulator needs to address a number of issues. The question is relevant insofar as prices are much higher in rural areas, and they will benefit more from any decrease in the price. We need to look at the cost to business, especially the ability to plan road fuel costs properly, because of the uncertainty that we have seen over the past year. I shall put that into context.
Notwithstanding what the Financial Secretary said earlier, the percentage of tax in the retail price has gone down by 8 per cent. in real terms—from 68 per cent. to 60 per cent. Duty and VAT still account for about 60 per cent. of the cost of a litre of petrol. Within that, there remains a great deal of scope for the Government to do something. To put the price into context, when we last debated the subject on 6 July 2005, I said:
“the AA, using its own estimates on unleaded petrol, indicated that some six months ago the price of a litre was about 80p. This month it is about 86p.”—[Official Report, 6 July 2005; Vol. 436, c. 361.]
During the past four or five weeks, the price per litre has crashed through the £1 barrier in many parts of Scotland. Since we had the debate less than a year ago, there has been a price rise of between 20 and 25 per cent.
Something needs to be done to assist the road haulage industry and those who live in remote rural areas and to provide businesses with more certainty as they budget for their road fuel costs. I will not push the new clause to a vote today. It is a probing amendment to see whether the Government have changed their mind in any way on the proposals we submitted last year and to allow consultation with the other parties in Northern Ireland, Scotland and Wales who backed the proposals last year. We may wish to come back to it on Report.

Rob Marris: I am surprised that an hon. Gentleman representing the Scottish National party in a seat in Scotland suggests that the measure would help the haulage industry. Of course, he and other hon. Members are more expert on the issue than I am, but I suggest that in Scotland the haulage industry competes principally with rail. Perforce, because of the lower density of population in Scotland, the rail network is less dense. The haulage industry is hit by the problem where we have a system of cabotage in the south of the country, where trucks may come from the continent where they pay lower fuel prices. By the time they get to Scotland, I would have thought that they had emptied their tanks so I cannot see how the measure would assist the haulage industry in Scotland.

John Healey: The hon. Member for Dundee, East was brief in his remarks. I will try to be similarly concise in mine. I pay tribute to the hon. Gentleman and to his party. They are dogged about pursuing the issue through the Finance Bill. He mentioned the Committee of the Whole House, which sat last July, though the proposal that we are considering this year turns on the oil price rather than on both the oil price and the pump price, as did last year’s proposal. It is a mechanism that would introduce considerable complexity. It would do little to bring stability to the UK market. It would also not offer any guarantee of reducing prices at the pumps because the duty increase to be frozen would more than likely be less than the fluctuations driven by the upstream oil market volatility.
At its heart, the new clause is based on a misconception, which is that high fuel prices lead to higher overall VAT receipts. The reality, particularly given the VAT regime, is that that is not necessarily the case. Where people spend more on one commodity, they tend to spend less on another, so the overall level of VAT receipts usually remains unchanged. Also, the hon. Gentleman did not mention that VAT-registered businesses can reclaim the VAT incurred when buying fuel for their business journeys, so the level of VAT that they pay at the pumps has little or no effect on their balance sheet.
In summary, it is for those reasons that the Government believe that the best way to deal with high oil prices is to work with oil-producing countries and, through the G8 Finance Ministers, to try to stabilise the volatility in the oil market to improve its functioning, rather than simply focusing on short-term changes in levels of duty, as the new clause does. The hon. Gentleman described it as a probing amendment. He reserves his right to return to the issue on Report. He may well press it to a vote at that point, but I remind him and the Committee that when he did so last year his proposition was defeated by 12 votes to 351.

Stewart Hosie: I thought that we got 18 votes. I say to the hon. Member for Wolverhampton, South-West on competition, a local haulier from my constituency came to see me recently devastated that it had lost a huge amount of business from 42-tonne wagons with big tanks filling up in Europe, coming up to Scotland and picking up business to return down south. So the issue of competition from those wagons is precisely what he described. It does not just exist in the south of England and the midlands but in my constituency. On competition to rail, I wish that what he said were so. If all the freight yards and the Red Star parcel offices were still open, and there was competition from that, perhaps the debate would be different but, as the hon. Gentleman knows, after 18 years of Conservative Government and, before that, Beeching, that is not the case.
I say to the Financial Secretary that I am aware that the use of VAT to offset fuel duty would not result in a full offset. The AA said that last year the price rose from 80p to 86p. Using the mechanism here—effectively the same one—that would have resulted in an offset of 1.2p. The industry supported that measure. It would provide the Government with yield and ameliorate the worst excesses of spiking and global price rises.
I have put that point on the record and listened to the Financial Secretary. I reserve the right to return to the issue at a later stage, but I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 179 ordered to stand part of the Bill.

Schedule 26

Repeals

Amendments made: No. 72, in schedule 26, page 203 [Vol II], leave out lines 14 to 18.
No. 223, in schedule 26, page 209, line 35 [Vol II], at end insert—
‘In section 61(9) the words “subsection (7) or”.'.
No. 224, in schedule 26, page 210 [Vol II], leave out line 6 and insert—
‘In paragraph 6—(a) in sub-paragraph (1), the words “Subject to sub-paragraph (3) below,” and(b) sub-paragraphs (2) and (3).'.
—[Dawn Primarolo.]

Schedule 26, as amended, agreed to.

Clauses 180 to 181 ordered to stand part of the Bill.

Dawn Primarolo: On a point of order, Sir John. Before we conclude the business, I would like to put on the record my thanks, on behalf of the Committee and all the Ministers, for the excellent way in which you, Sir John, as well as Mr. O’Hara, and Mr. Benton have stewarded, assisted and ably guided the Committee through our complex debates. I would like also to thank the Clerks, the Hansard writers and the Doorkeepers for their help and assured touch in making the business of the Committee run smoothly.
I congratulate the hon. Member for Chipping Barnet; speaking for the Opposition on the Finance Bill is a huge challenge, and this was her first time doing so. She was ably assisted by the hon. Members for Rayleigh (Mr. Francois), for Wycombe (Mr. Goodman) and for Fareham (Mr. Hoban)—her Front Bench team.
I congratulate also the hon. Member for Falmouth and Camborne who, too, was in her first Finance Bill and supported by her colleague, the hon. Member for South-East Cornwall (Mr. Breed). I congratulate all the other Opposition Members on their—I do not want to make anyone laugh—patience and skill in contributing to a thorough and high-quality debate, despite the competing demands of other issues, particularly the World cup.
I thank my hon. Friends the Financial Secretary, and especially the Economic Secretary—it was his first Finance Bill too—for some new concepts. We now know what “straddling” means—not always in terms of the legislation, but certainly the posture of Ministers. We were greatly encouraged by the Economic Secretary’s observations today on philosophy, and I think that all of us are assured that tax legislation will be safe in his hands.
I congratulate the right hon. Member for North-West Hampshire (Sir George Young) on attending a Finance Bill after 10 years. He said that he will not come back for another 10 years. All I can say is, “Good luck”: being in Opposition will be just as unpleasant to him then as it is now. I thank Mrs. Gauke, who at times I thought was a Committee member. I do not know what we would have done without her. Actually, I do know but I am not unkind enough to say.
I also thank my hon. Friend the Member for Wolverhampton, South-West. I do not think that he realises this, but he makes many officials in HMRC happy because, as they slave over explanatory notes and regulations, they know that there are at least some in this world who read those notes and regulations intently and have questions to ask of them. I am not sure that Ministers always welcome those questions; none the less my hon. Friend has played his part.
I thank all my hon. Friends who have participated for all the hard work that, I am sure, they have done and for participating in the Committee. I am eternally grateful—I really am—for their support and assistance in ensuring proper discussion of the Bill.
I thank all those from the professional bodies who brief us and who have supported all Members on the Committee and, dare I say it, my officials.
I know it is inappropriate but I thank the Whips. Normally they are not referred to in Committee but they have done a splendid job in ensuring that we have timely discussion, not for too long but of appropriate length.
I look forward to the remaining stages of the Bill. Again, I put on record our thanks to you, Sir John., in what is, I think, your 16th Finance Bill.

John Butterfill: Or 17th.

Dawn Primarolo: Or 17th. I hope that you do many more.

Theresa Villiers: Further to that point of order, Sir John. After what seems like several years, we are at the end of the Committee. We had the thrills and spills of snagging, straggling, probing, turbo-charging, recycled reheated turbo-charging and pre-emptive reversed multiple turbo-charging. That was just this morning. Both the Economic Secretary and I demonstrated our inability to pronounce Arabic financial instruments. We had a lively discussion on whether the age of financial capability and responsibility was appropriately 18, 25 or, in the case of the hon. Member for Wolverhampton, South-West, 52.
As the temperature climbed, I felt that the Committee lost the will to live but our sentence is nearly up, or at least we are on day release until Report in a couple of weeks. I echo the thanks of the Paymaster General to our three Chairmen—to you, Sir John, and to your co-Chairmen, Mr. O’Hara and Mr. Benton—for the exceptionally patient and skilful way in which you guided our deliberations in Committee. Like the Minister, I give my grateful thanks to the Doorkeepers and to the Hansard reporters for their hard work and assistance.
I also thank the Clerks of the Committee—Malcolm Jack for his work on the Committee of the Whole House and Frank Cranmer for his incredible patience and hard work in assisting all Members of the Committee on the difficult task of taking a Finance Bill through the scrutiny process. It was certainly a challenge to take on the Finance Bill as my first Standing Committee and to lead for the Opposition on it. I am grateful for the assistance given to me by Mr. Cranmer and the Clerks of the Committee.
I am also grateful to my Front-Bench team—my hon. Friends the Members for Rayleigh, for Wycombe and for Fareham—for their hard work. They all worked exceptionally hard, as did the Back-Bench team. I see that some of the latter have retired hurt, but they endured the lengthy deliberations with great application and diligence.
In his absence, I apologise to my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) for getting in trouble for passing notes in class. I repeat my apologies to the Committee for getting that wrong. I note that my hon. Friend has fled the country, but I am sure that it is not because of anxiety about contempt of Parliament. I also pay tribute to Mrs. Gauke, who was ever present in our discussions, if not in fact.
I acknowledge the civilised approach taken by those on the Government Front Bench in almost all the Standing Committee debates. We had some lively exchanges and some constructive ones. I am grateful for the movement we saw from the Paymaster General on schedule 20. I also thank the Liberal Democrat Members for their occasional guest appearances. I pay tribute to the hon. Member for Dundee, East (Stewart Hosie) who made some thoughtful contributions on film and on oil.
Lastly, I put formally on the record my thanks to the many professionals, experts and organisations that provided a wealth of commentary and advice on the Finance Bill. A particular “thank you” should go to PriceWaterhouseCoopers for the advice and assistance given to the whole Opposition Front-Bench team. We owe it a large debt of gratitude for its assistance. In similar vein, I should like to express my thanks to KPMG for similar assistance and advice. It is impossible to run through all the individuals and groups on whose briefings I and my colleagues have relied, but they certainly include the Society of Trust and Estate Practitioners, the Chartered Institute of Taxation, the Law Society and the Institute of Chartered Accountants in England and Wales. Without their assistance, it would have been simply impossible to provide the effective scrutiny necessary for so important a piece of legislation. Lastly, I thank the Whips for, as the Paymaster General outlined, managing the whole process in a very civilised and effective manner.

Julia Goldsworthy: Further to that point of order. Sir John. I shall keep my remarks short in case it degenerates into an Oscar-style ceremony of thank yous. I should like to add my thanks to you, Sir John, for chairing the sittings so skilfully. I also thank the other Chairmen, Mr. O’Hara and Mr. Benton. With so many Finance Bill virgins—I suppose one might put it that way—on the Committee, it must have been difficult to ensure that we all remained in order.
I would also like to thank the Paymaster General for her very kind words, and I congratulate the hon. Member for Chipping Barnet on doing such a sterling job on her first time. I would also like to thank my colleagues and the professional bodies who made my life a lot easier during my first Finance Bill. It has been a baptism of fire, but I have enjoyed it, and I am sure that I shall many happy memories, once I am looking back at it. I am sure that that will be the same for the remaining stages. Finally, I forgot to thank the Clerks for all their help, because so much of the procedure was new, and their patience and guidance was much appreciated.

Stewart Hosie: May I, Sir John, thank you for your chairmanship, as well as that of Mr. O’Hara and Mr. Benton? This was my first Finance Bill Committee, and I have learned a great deal from it. I would like to be in a position to thank my hon. Friends for all their help and assistance, but such is the lot of a small party. I thank all the staff. Sadly, I fear that, like the hon. Member for Wolverhampton, South-West, I am looking forward to next year already.

John Butterfill: I will certainly report to Mr. O’Hara and Mr. Benton hon. Members’ thanks, and I am very grateful to them for those kind words. It has been an excellent Committee, which has conducted its proceedings with courtesy and extraordinarily good humour—at times, a little ribald for the Chair, but there we are. With my usual masochism, I have to say that I have enjoyed it greatly.

Bill (except clauses 13 to 15, 26, 61, 91 and 106, schedule 14 and new clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Act 1984), as amended, to be reported.

Committee rose at two minutes to Six o’clock.